Ed Miliband told: raise your game

Ed Miliband has been put on notice that Labour faces a major battle if it is to secure an overall parliamentary majority next year after the local elections showed that the party is struggling to achieve the sort of breakthrough that would signal a Westminster victory.

Labour took heart after it topped the local polls in England with 31% of the vote – up two points on last year – as the Tories came second and Ukip failed to translate an expected victory in the European elections into a breakthrough in council seats.

But Miliband faced murmurings of discontent at all levels of the party, up to the shadow cabinet, amid signs that Labour is struggling to look like an opposition party on the eve of a general election victory.

Its share of the vote was seven points below its score a year before Neil Kinnock lost the 1992 election, though that was in the era of three-party politics before the rise of Ukip.

Miliband was criticised for a series of media mishaps during the campaign, which was described as "tremendously ill-judged" by one backbencher.

Ed Balls, the shadow chancellor, highlighted unease at the highest levels of the party over what some saw as an overly cautious approach on immigration when he told The World at One on BBC Radio 4: "It is not good enough yet for Labour. We have more to do if we are going to really win the argument. Whether on Europe or immigration or on the economy, Labour has got more to do to show we can deliver the real fair change people want to see."

As part of the fallout, some shadow cabinet members say they were crowded out of a campaign that failed to project Labour as a team that includes strong women such as Harriet Harman and Yvette Cooper. There is also anger that Miliband focused too much on policy rather than projecting an empathy with voters' sense of alienation from the political class.

Harman said: "People need more than policies. They need to be able to have confidence in their local and national politicians. We've got more to do."

The Labour inquest was taking place as the final results showed a mixed picture for all the parties. Ukip, long regarded as on the march, actually saw its projected share of the vote fall by six points compared with last year, from 23% to 17%, according to BBC calculations. Experts identified Ukip polling 20% in most of the country but just 7% in London.

The Liberal Democrat vote fell by one point to 13% while David Cameron's leadership was stabilised as the Tory vote increased by four points to 29%.

It was estimated that this would translate into 322 seats for Labour at a general election, 255 for the Conservatives, 45 for the Lib Dems and other parties, including Ukip, 28 seats.

Labour achieved nearly 300 council seat gains – well above its forecast of 200 – as it secured important victories by winning control of Hammersmith and Fulham, Croydon, Harrow and Amber Valley from the Tories. But the gain in seats was well behind the 490 identified by the psephologists Michael Thrasher and Colin Rallings as the number required to show that it is a potentially winning force.

The Tories lost nearly 200 seats but managed to wrest control of Kingston upon Thames from the Lib Dems.

Nick Clegg faced a challenge to his authority when an e-petition was launched last night by grassroots Liberal Democrats urging him to resign "so the party may once again get a fair hearing". The petition is supported by the former Lib Dem MP for Romsey, Sandra Gidley and Bill le Breton, the former chair of the Association of Lib Dem Councillors.

A Guardian analysis showed that the Lib Dems are on course to lose 20 of their parliamentary seats – nearly a third of the total – in what would be a blow to the authority of the deputy prime minister. But it would avoid what is being described as the "nuclear wasteland" in which the party would lose two thirds of its seats to take it down to the 20 seats it won in 1992.

The Liberal Democrats were undertaking a damage limitation exercise arguing the local election results showed the party could hold on in many of the parliamentary constituencies it currently holds. But the figures for England also showed it was going to lose a large number of its seats where Labour is the challenger. The results due on Sunday may show how badly it is doing in Scotland and Wales.

The Liberal Democrats were likely to lose as many as 300 seats.

A Liberal Democrat source said: "The results were a tale two elections. They are remarkably good against the Tories, but very bad against Labour especially in London." The source added "the bottom line is that a hung parliament is still the most likely outcome".

John Curtice, professor of politics at Strathclyde University, said the surprise was Ukip's less than inspiring performance. Curtice said: "They did pretty well but we shouldn't exaggerate it. Actually the performance is not quite as good as last year's stupendous performance. Given that these elections were taking place at the same time as Euro elections, which we know from previous experience tends to help Ukip to win votes at local elections, one might say: good but not brilliant.

"There was one big lacuna in this performance and that was London. London, with its much younger, more highly educated and much more ethnically diverse population, very clearly illustrated the limits of Ukip's appeal which is primarily to older, white, working-class people."

Nigel Farage declared that Ukip had broken the political mould and was on course to win seats in parliament next year. "The Ukip fox is in the Westminster hen house. There are areas of the country where now we have got an imprint in local government. Under the first-past-the-post system we are serious players."

Cameron said he understood the message from the voters, who he said wanted the government to work harder on issues such as welfare and immigration reform. "We will be working flat out to demonstrate that we do have the answers for hardworking people," he said.

The prime minister rejected calls from Eurosceptic Tories to form a pact with Ukip before next year's general election. He told Sky News: "We are the Conservative party. We don't do pacts and deals. We are fighting all-out for an all-out win at the next election."

But the greatest soul-searching was in the Labour party. John Mann, the MP for Bassetlaw, condemned what he called Labour's "so-called strategists" for failing to exploit Farage's admiration for Margaret Thatcher.

Mann told the Guardian: "It was a tremendously ill-judged campaign, in particular the deliberate decision made not to attack Ukip.

"Some of the so-called strategists at the top of the Labour party think Ukip doing well is good news because it will damage Cameron. Well, they need to get out of their ivory towers and get back into the real world."